Department of Defense awards $658.8M contract for logistics support services to Kellogg Brown & Root Services

Contract Overview

Contract Amount: $65,883,936 ($65.9M)

Contractor: Brown & Root Services

Awarding Agency: Department of Defense

Start Date: 2003-10-13

End Date: 2011-04-21

Contract Duration: 2,747 days

Daily Burn Rate: $24.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200401!000013!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!N! !Y!0030 ! !20031013!20040527!133468954!133468954!964409007!N!KELLOGG BROWN&ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!00000! !BK!* !* !BOSNIA !+000003573858!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !* !561210!E! !5!B!S! ! !D!20040527!B! ! !B! !A!Y!R!2!002!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!00 !A!B!N! ! !Y!Y! ! !0001! !

Plain-Language Summary

Department of Defense obligated $65.9 million to BROWN & ROOT SERVICES for work described as: 200401!000013!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!N! !Y!0030 ! !20031013!20040527!133468954!133468954!964409007!N!KELLOGG BROWN&ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!00000! !BK!* !* … Key points: 1. Contract awarded through full and open competition, indicating a competitive bidding process. 2. The contract type is Cost Plus Award Fee, which incentivizes performance but can lead to higher costs. 3. The duration of the contract is substantial, spanning over 2700 days, suggesting a long-term need for these services. 4. The awarded amount is significant, reflecting a major commitment to logistics support. 5. The contractor, Kellogg Brown & Root Services, has a substantial presence in government contracting. 6. The contract is for logistics support services, a critical function for military operations.

Value Assessment

Rating: fair

The total value of this contract is $658.8 million over its life. Without specific benchmarks for similar logistics support services in the Bosnia region during that period, a precise value-for-money assessment is challenging. However, the Cost Plus Award Fee (CPAF) contract type suggests that the government aims to incentivize performance, but it also carries the risk of costs exceeding initial estimates if performance targets are aggressively pursued or if costs are not tightly managed. The number of bids received (2) is relatively low for a contract of this magnitude, which could indicate limited competition or a specialized service.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. However, only two bids were received. This limited number of bidders for a large-value contract could suggest a specialized market, high barriers to entry for potential competitors, or that the solicitation was structured in a way that attracted only a few interested parties. The level of competition directly impacts price discovery and potentially the final negotiated price.

Taxpayer Impact: While full and open competition is generally favorable for taxpayers, receiving only two bids may have limited the downward pressure on pricing that a more robust competition could have generated.

Public Impact

The primary beneficiaries are the U.S. military personnel and operations requiring logistics support in the designated geographic area (Bosnia). Services delivered include a broad range of logistics support, essential for maintaining operational readiness and effectiveness. The geographic impact is focused on the operational theater in Bosnia, supporting U.S. and potentially allied forces stationed there. Workforce implications include the creation of jobs for personnel employed by Kellogg Brown & Root Services and its subcontractors, both locally and potentially from the U.S.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can lead to cost overruns if not meticulously managed.
Limited competition (2 bidders) for a large contract may indicate a lack of market dynamism or potential for higher prices.
The long contract duration (over 7 years) increases the risk of scope creep or changing operational needs not being adequately addressed.

Positive Signals

Awarded under full and open competition, theoretically allowing for the best value.
The Cost Plus Award Fee structure incentivizes contractor performance, potentially leading to better service delivery.
The contractor, Kellogg Brown & Root Services, is a large, established entity with significant experience in government contracting, suggesting a lower risk of contractor failure.

Sector Analysis

This contract falls within the broader defense logistics and support services sector. This sector is characterized by large, complex contracts often awarded to major defense contractors. The market size for such services is substantial, driven by ongoing military operations and global presence. This specific contract for services in Bosnia represents a significant portion of spending within a particular operational theater, highlighting the critical role of private sector logistics providers in supporting military missions. Comparable spending benchmarks would typically involve analyzing other large-scale logistics contracts awarded by the DoD in similar operational environments.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). There is no explicit information regarding subcontracting plans for small businesses within the provided data. Without this information, it is difficult to assess the direct impact on the small business ecosystem. However, large prime contractors like Kellogg Brown & Root Services often engage small businesses for specialized support, so there could be indirect opportunities, but this contract itself does not appear to prioritize small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. The Cost Plus Award Fee structure implies performance metrics that would be monitored to determine award fees. Transparency would be subject to federal procurement regulations and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

DoD Logistics Support Contracts
Contingency Operations Support
Base Operations Support (BOS)
Services Contracts
Cost-Plus Contracts

Risk Flags

Cost Plus Award Fee contract type carries inherent cost risk.
Limited number of bidders (2) may indicate reduced price competition.
Long contract duration increases exposure to changing requirements and economic factors.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $65.9 million to BROWN & ROOT SERVICES. 200401!000013!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!N! !Y!0030 ! !20031013!20040527!133468954!133468954!964409007!N!KELLOGG BROWN&ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!00000! !BK!* !* !BOSNIA !+000003573858!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !* !561210!E! !5!B!S! ! !D!20040

Who is the contractor on this award?

The obligated recipient is BROWN & ROOT SERVICES.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $65.9 million.

What is the period of performance?

Start: 2003-10-13. End: 2011-04-21.

What was the historical spending pattern for logistics support services in Bosnia prior to this contract?

The provided data focuses on a single contract awarded in 2003. To understand historical spending patterns for logistics support in Bosnia, a broader analysis of historical contract awards by the Department of Defense and other relevant agencies for that region would be necessary. This would involve searching federal procurement databases for similar services, contract types, and durations awarded in the years preceding this contract. Factors such as the scale of military operations, geopolitical stability, and the availability of alternative support mechanisms would influence historical spending. Without access to that broader historical data, it's impossible to provide a specific spending pattern.

How does the per-unit cost of services under this contract compare to industry benchmarks?

Determining a precise per-unit cost benchmark for this contract is challenging without detailed breakdowns of the services provided and their associated costs. The contract is for 'Logistics Support Services' valued at $658.8 million over approximately 7.5 years. This is a broad category that could encompass transportation, warehousing, maintenance, supply chain management, and more. To establish a benchmark, one would need to identify specific, quantifiable units of service (e.g., cost per ton-mile for transportation, cost per square foot for warehousing, cost per maintenance hour) and compare them to prevailing market rates for similar services in the Bosnia region during the contract period. The Cost Plus Award Fee structure also complicates direct per-unit cost comparisons, as the final cost is influenced by performance incentives.

What is the track record of Kellogg Brown & Root Services with similar large-scale logistics contracts?

Kellogg Brown & Root Services (KBR), and its predecessor entities, has a long and extensive track record of performing large-scale logistics and support services contracts for the U.S. government, particularly for the Department of Defense in complex operational environments. They have been a major contractor in regions like Iraq and Afghanistan, providing a wide array of services including base support, transportation, food services, and construction. Their history includes both highly successful contract executions and periods of scrutiny regarding cost management and contract oversight. Therefore, their track record is characterized by significant capacity and experience, but also by the inherent complexities and challenges associated with managing vast, high-value government contracts in demanding conditions.

What were the specific performance metrics used to determine award fees under this Cost Plus Award Fee contract?

The specific performance metrics for a Cost Plus Award Fee (CPAF) contract are defined in the contract's Performance Work Statement (PWS) and the contract clauses related to award fees. These metrics are typically tailored to the specific services being procured and are designed to incentivize the contractor to exceed minimum performance standards. For a logistics support contract, metrics could include on-time delivery rates, inventory accuracy, equipment uptime, response times for service requests, cost control measures, and adherence to safety and environmental standards. The government's evaluation team would assess the contractor's performance against these metrics, and based on that assessment, determine the level of award fee, if any, to be paid in addition to the cost reimbursement.

How did the number of bidders (2) impact the final negotiated price compared to a scenario with more bidders?

A lower number of bidders, such as the two received for this contract, generally suggests less competitive pressure on pricing. In a highly competitive environment with numerous bidders, companies are often incentivized to offer lower prices to secure the contract. With only two bidders, the government may have had less leverage to negotiate down the price, as the risk of the preferred contractor walking away or being unable to meet all requirements might be higher. While the contract was awarded under 'full and open competition,' the practical outcome of only two bids means the price discovery mechanism was less robust than it could have been with a larger pool of interested and capable offerors. The final negotiated price would reflect the costs and profit margins deemed acceptable by both the contractor and the government, within the constraints of the limited competition.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 4100 CLINTON DR, HOUSTON, TX, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DACA7899D0003

IDV Type: IDC

Timeline